Open Letter to Those Who Don't Give to Charity

I bet I know why you don't give. You're not a bad person. Actually, you're probably a pretty good person: caring, compassionate and generous with your friends and family. Though some of you may not have enough to give, most of you can afford to make at least modest donations. But you're skeptical of charities -- you don't know which ones will use your money wisely. I used to be the same way.

I doubted the claims charities made. Those inspiring stories about the people they helped -- they seemed too rosy to be true, and probably weren't representative situations. And what about the token gifts they send us like return address labels, or some other "free" gifts for donating? Are those charities spending inappropriate amounts of money on presents for donors? Sometimes your friends want you to sponsor them for a marathon or other athletic event; you wonder how much money it costs to put on those big events. And the gala parties charities throw -- there's no need to wonder about them, because it's obviously a lot. And what about the claim of "100 percent goes to charity?" It sounds like funny accounting -- how do they pay the rent without any overhead costs? Sometimes you feel guilty for not giving to charity, but you wouldn't feel good about giving if you think there's a pretty good chance your money will be wasted.

There's something skeptics should know: You're right. A lot of charities are mediocre. They spend a lot of money pandering to donors, doing whatever it takes to keep the money flowing in. Yet they don't demonstrate that their core programs actually work.

Fortunately, over the past few years, some skeptics have gotten in the business of evaluating charities. That's right. There's a new breed of charity evaluators that dig deep to provide the information that skeptics like us need. They don't try to rate every charity because there's little value in differentiating the average from the slightly above average; instead, they seek to identify the best of the best. Here's a rundown of some of my favorite charity evaluators:

GiveWell was founded in 2007 by hedge fund analysts, originally looking for more rigor in how to donate their own money. They've researched hundreds of charities, including site visits to many, and their highest recommendations go to only three charities -- the ones with the most compelling evidence of impact.

The Life You Can Save looks for charities that are extremely effective at either saving lives or reducing suffering among the world's poorest people. The charities they recommend use low-cost, but proven ways to do this.

Giving What We Can focuses on global poverty issues, sharing their views on the organizations which are most effective at reducing global poverty as well as encouraging people to pledge to give at least 10 percent of their income to this cause.

Innovations for Poverty Action was not originally a charity evaluator. It was a research organization founded by economists to help identify what works and what doesn't in aid programs. They evaluate hundreds of programs every year, and have expanded to help grow the ones with the strongest evidence of impact.

The Center for High Impact Philanthropy provides recommendations for a much wider range of charitable causes than the other charity evaluators described. This can be good if you want options, but less helpful if you want more directive expert advice.

The causes and charities these organizations recommend might not be familiar to you. Some might actually sound kind of weird. They don't recommend charities because they're famous, have big advertising budgets, or work on well-known causes. Instead, they research the charities that are delivering top-notch results. Isn't that the point of giving?

It is worth noting that the list above excludes some well-known charity rating agencies such as Charity Navigator, the Better Business Bureau, Guidestar, and CharityWatch. Their ratings are dominated by measuring the charities' financial efficiency, governance and transparency, but they do not evaluate the effectiveness of the charities' programs.

So if you're been holding back on charitable giving because of concerns about your money being wasted, the information available now is far better than ever before. In my own case, it took time to digest the rationale for differences between the recommendations from these professional evaluators and my preconceived notions, but eventually I concluded that their research and logic is very sound. If the reason you haven't given to charity in the past is truly because you couldn't figure out how to pick a worthwhile charity, then now you know how to solve that problem -- and just in time for a final year-end donation.